Fresh thinking on economic cooperation in South Asia

That regional cooperation in South Asia is lower than optimal levels is well accepted. It is usually ascribed to – the asymmetry in size between India and the rest, conflicts and historical political tensions, a trust deficit, limited transport connectivity, and onerous logistics, among many other factors.

Deepening regional integration requires sufficient policy-relevant analytical work on the costs and benefits of both intra-regional trade and investment. An effective cross-border network of young professionals can contribute to fresh thinking on emerging economic cooperation issues in South Asia.

Against this background, the World Bank Group sponsored a competitive request for proposals.  Awardees from Bangladesh, India, and Pakistan, after being actively mentored by seasoned World Bank staff over a period of two years, convened in Washington DC to present their new and exciting research. Research areas included regional value chains, production sharing and the impact assessment of alternative preferential trade agreements in the region.

Young Economists offer fresh thoughts on economic cooperation in South Asia

Mahfuz Kabir, Acting Research Director, Bangladesh Institute of International and Strategic Studies and Surendar Singh, Policy Analyst, Consumer Unity Trust Society (CUTS International) presented their research: Of Streams and Tides, India-Bangladesh Value Chains in Textiles and Clothing (T&C). They focus on how to tackle three main trade barriers for T&C: a) high tariffs for selected, but important goods for the industries of both countries; b) inefficient customs procedures and c) divergent criteria for rules of origin classification.

Sreerupa Sengupta, Ph.D. Scholar at Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi discussed Trade Cooperation and Production Sharing in South Asia – An Indian Perspective. Reviewing the pattern of Indian exports and imports in the last twenty years, her research focuses on comparing the Global Value Chain (GVC) participation rate of India with East Asian and ASEAN economies. Barriers to higher participation include a) lack of openness in the FDI sector; b) lack of adequate port infrastructure, and long port dwell times; and c) lack of Mutual Recognition Agreements (MRAs).

Aamir Khan, Assistant Professor, Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad presented his work on Economy Wide Impact of Regional Integration in South Asia - Options for Pakistan. His research analyzes the reasons for Pakistan not being able to take full advantage of its Free Trade Agreement (FTA) with China, and finds that the granting of ASEAN-type concessions to Pakistan in its FTA with China would be more beneficial than the current FTA arrangement. The work also draws lessons for FTAs that are currently being negotiated by South Asian countries.

With the support of the World Bank staff, all the research work will be subsequently published on different World Bank South Asia platforms like the SARConnect Policy Note Series/ #OneSouthAsia Blog Series.

Presentations were made at the South Asia Regional Trade and Integration Conference (SARTIC 2017), a full-day event organized by the Trade & Competitiveness Global Practice, South Asia Region, and the Development Economics Vice Presidency, Trade team on June 28, 2017 at the World Bank Headquarters in Washington DC. Staff from the World Bank Group, Inter-American Development Bank (IDB), the United States Government, think tanks, as well as participants from academia and the private sector joined the event.

 “We were gratified by the response to the program and the conference. It is a small step, but we are satisfied, given that regional integration in South Asia is a long and evolutionary process. This and other similar efforts can, over time, help to create a more informed consensus on regional integration,” said Sanjay Kathuria, Lead Economist and Coordinator for South Asia Regional Integration in the World Bank Group’s Trade and Competitiveness Global Practice.

Sometimes, when you share facts, you share emotions too!

That’s what these South Asian scholars also did. Rigorous and evidence-based analytical work and more people-to-people interaction bring us a step closer to the idea of ‘ One South Asia’.